Spotlight on the domestic soybean market

• While the soybean harvest process has been completed, farmers continue to deliver the crop to commercial silos. In the week of 10 August 2018, about 1 503 tonnes of soybeans was delivered to commercial silos, up by 18 percent from the previous week. The yields in most areas varied between average and above-average, which is in line with market expectations.
• This placed South Africa’s 2018/19 marketing year soybean producer deliveries at 1.46 million tonnes, which equates to 94 percent of the expected harvest of 1.55 million tonnes. An additional volume could be delivered over the coming weeks as weather outlook is quite favourable for logistics from farms to silos, with the exception of the last week of this month which could bring light showers in most parts of the country.
• The volume of soybeans delivered thus far has boosted domestic soybean stocks, which were estimated at 1.40 million tonnes in June 2018, up by 2 percent from the previous month and 37 percent from the corresponding period last year.
• To reiterate a point made in the previous notes, the general expectations of a large harvest this season could lead to a decline in imports as the country is increasingly becoming reliant on domestic produce. We estimate that South Africa’s soybean and oilcake imports could decline by 64 percent and 17 percent year-on-year in the 2018/19 marketing year to 10 000 tonnes and 458 992 tonnes, respectively.
• One of the countries that were a key suppliers of soybean to South Africa in the 2017/18 marketing year is Zambia. However, this time around, the country might not be in a position to export large volumes of soybeans to South Africa due to the expectation of a lower harvest. The USDA forecast Zambia’s soybean production at 300 000 tonnes, down by 15 percent from the 2016/17 production season. Most importantly, this is well below the country’s annual soybean consumption of 328 000 tonnes.

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